Poverty and land redistribution

Malcolm Keswell, Michael R. Carter
2014 Journal of Development Economics  
Despite a theoretical literature that promises that land transfers will have large impacts on the well-being of poor households, well-identified empirical evidence on the efficacy of land redistribution is scarce. In an effort to fill this gap, this paper examines South Africa's Land Redistribution for Agricultural Development (LRAD) program. We exploit features of LRAD program implementation to extract exogenous variation in whether, and for how long, applicant households enjoyed land
more » ... joyed land transfers. Binary treatment estimates, which compare treated with untreated households, show that beneficiary households on average experienced a 25% increase in per-capita consumption. Our preferred continuous treatment estimates, which analyze only the subset of treated households, identify the impact time path of land transfers on consumption. These estimates show that living standards initially drop and then, after 3-4 years, rise to 150% of their pre-transfer level. These results are statistically significant and robust to a statistically more conservative identification strategy. provided excellent research assistance. 2 Foundations for this perspective are found in static models such as Bardhan et al. (2000) , Dasgupta and Ray (1986) , Eswaran and Kotwal (1986) , and Mookherjee and Ray (2002) . Subsequent theory has shown that overall economic performance can remain sensitive to asset inequality even in the context of dynamic models in which agents have time (and optimal savings plans) as another degree of freedom to work around missing contracts and financial markets.
doi:10.1016/j.jdeveco.2013.10.003 fatcat:negdzmyhobghxdywxdtu72apti